Law Offices of Richard Scott Zirt

Rebuild Your Future Without Debt

Bankruptcy FAQ

What is bankruptcy, and will the process wipe out all of my debts?

Bankruptcy is a process provided for by Federal Law whereby individuals can obtain relief from their debts.  It will generally discharge most but not necessarily all of your debts.  For instance certain taxes may not go away.

What are the different types of bankruptcy?

Yes, there are different Chapters of Bankruptcy, such as Chapter 7, Chapter 11, Chapter 12, Chapter 13.

What are the main differences between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 is a liquidation bankruptcy whereby an individual or business obtains relief from its secured and/or unsecured debts.  Chapter 13 is a repayment bankruptcy whereby an individual repays its secured arrears in full and some portion of its unsecured indebtedness.

Which bankruptcy option will allow me to keep my property?

Depending on what types of “property” you own, you may or may not be able to keep your “property” in either form of bankruptcy.  It would depend upon the value of that “property” and the amount of equity in the “property”.

Can I choose which type of bankruptcy to file? How do I choose the right one?

You can always choose which type of bankruptcy to file.  However, the choice of which bankruptcy best fits your individual circumstances is best left up to an experienced bankruptcy attorney to lay out for you and that attorney can explain the reasons why one bankruptcy best fits your situation and why the other choices are not the best to file in your particular situation.

Should I file for bankruptcy?

That would depend upon your individual circumstance.  If filing for a bankruptcy benefits you financially or legally then it likely is the best choice.  If you get no benefit from filing bankruptcy then there is no point in filing for bankruptcy.  People file bankruptcies for all different reasons.  Protections from creditors, stop lawsuits, stop foreclosure, stop repossessions, stop wage garnishments, stop IRS levies, etc.

Is there a certain amount of debt to qualify for bankruptcy?

There is no minimum amount however there are upper limits on how much secured and unsecured debts you may have in a Chapter 13 Bankruptcy.  Currently the secured limits on Chapter 13 are $1,257.850 and for unsecured debt it is $419,275.

Do I have to be a certain age to file for bankruptcy?

The Debtor must be over the age of 18 years of age to file into any form of bankruptcy.

Do you need a lawyer to file for bankruptcy or can you file on your own?

It is not mandatory to have a lawyer to file for bankruptcy.  However it is a highly technical filing and rife with pitfalls and should only be undertaken with a full understanding of the laws involved.

What is the process for filing for bankruptcy?

The process of filing takes too long to explain in a simple paragraph.

Does bankruptcy eliminate all of my debts?

Bankruptcy will eliminate most debts, however there are certain exceptions to discharge in bankruptcy which are set forth in 11 U.S.C. §523.  There are roughly 15 things that bankruptcy does not discharge.

Who will know if I file for bankruptcy?

Because a bankruptcy is filed in a public Bankruptcy Court it is not done in secret and it is on file with the Bankruptcy Court and can be looked up in the Bankruptcy Clerk’s records.  However, unless you happen to be a media worthy type of individual whose name often appears in the newspaper, who would want to research your bankruptcy?  How often do you appear in newspapers or other public documents?

How will bankruptcy affect my business?

It depends on the nature and character and value of your business.  What does your business consist of?  Without knowing what your business is worth and what your business accounting shows your business balance sheet to be valued at, I would not be able to answer that question.  I would ask your accountant to give me a current balance sheet on your business if the business was a separate incorporated entity.

Will bankruptcy stop foreclosures or repossessions?

Yes, it can stay foreclosures and repossessions.

Can I wipe out medical bills by filing for bankruptcy?

Yes you can discharge medical bills by filing for bankruptcy protection.

Is student loan debt dischargeable in bankruptcy?

Generally student loan debt is not dischargeable in bankruptcy except with very limited exceptions.

Will filing for bankruptcy stop collections calls and creditor harassment?

Yes, filing for bankruptcy will stop collection calls and creditor harassment upon the filing of the bankruptcy petition.